Mining stocks have had an interesting history throughout 2020. The price of gold and silver skyrocketed to new highs this year. It was a seemingly normal year for mining stocks at first. That was until the pandemic took over the world in March and caused the stock market to crash. COVID numbers continued climbing as the world went into a full state of lockdown. When the economy is in a bad spot, mining stocks tend to go up in price. People will hold precious metals as a physical asset rather than the dollar for a stronger sense of security. Then following the lockdowns came stimulus money from the government. This stimulus money was issued to people, businesses, and more.
By April 2020, unemployment reached a new record high at 14.7%. For those who were already invested in precious metals before, saw great benefit from this. Gold, silver, and other minerals continued to rally higher as the world continued through a state of uncertainty. For a while it seemed like gold prices and other metals could be predictable. At one point gold prices even reached above $2000 per ounce. But now the world is in a much different place as we approach the end of one of the hardest years for many people of this generation.
Mining Stocks In Mid December
So now we have reached the mid December point of 2020. What things are currently affecting the price of mining stocks? The market for mining stocks at the moment is certainly more volatile than it was a few months ago. Things are still uncertain for the direction that metal prices will go because of the stuff happening in the news right now. This can make things confusing for those who are new to investing in the sector, maybe some seasoned investors too. What is most important is to know exactly what you are getting yourself into when investing in mining stocks. Good research is essential. Key things to look for include volume, recent news, financials, proven and probable minerals, and more. Now let’s take a look at the first thing that is impacting the price of mining stocks in December.
How Vaccine News Shapes The Future Of Mining Stocks
Let’s get the negatives for the price of mining stocks out of the way first. Just a few weeks ago news came out that a vaccine candidate that is 95% effective exists. Soon after it became a race between countries to approve and distribute the vaccine. On the week of December 15th, the vaccine was approved for use in the United States. On December 14th the first dose of the vaccine was given in the United States in New York. It is being given to healthcare workers and elderly first.
The first batch of the vaccine is arriving at the 2.9 million mark. It is being shipped from Pfizer to the United States via FedEx and UPS. Now that the vaccine is being distributed, it could cause a quicker economic recovery. This in turn hurts the price of mining stocks. The FDA is reportedly planning on approving another vaccine candidate by Friday. Vaccine news hurts precious mineral prices because of the economic impact it could have. If much of the world gets vaccinated then things could go back to a more normal state. Let’s move on to the second thing that is actively impacting the price of mining stocks as we know them.
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Stimulus Bill Impacts Mining Stocks
There is currently a bill in talks for more stimulus from the government. Senate negotiators are trying to get a bill passed as soon as possible, but it all depends on getting both sides to agree. The deal will likely include enhanced federal unemployment benefits and much more. Despite this it will not distribute more $1200 stimulus checks. The $908 billion proposed plan is awaiting approval, which would put $6 billion into vaccine distribution as well. Progress is being made with the advancement of the deal. Yet still nothing has been approved. The Senate Minority Leader for the New York district said that he wants to approve more relief this week.
Republican leaders have stated they are also determined to pass a coronavirus stimulus that both sides can agree on. The primary things it will focus on is vaccine distribution, forgivable loans for small businesses, and school support. It will be interesting to see what ends up happening with this cause it will have a positive effect on mining stocks if passed. More government stimulus brings the value of the dollar down. That is why there are plenty of mining stocks to watch in this time where the bill could pass any day now.
What Is Next For Mining Stocks?
Right now investors are waiting for key advancements to be confirmed. These being the vaccine news and stimulus bill news. Not much can happen in this sector until those move forwards. At the moment, mining stocks seem to be a waiting game. It will be super interesting to see how this sector advances in the next few weeks. Vaccine distribution continues to be approved in places, and the stimulus bill is still in talks. All of this could potentially lead to unexpected unemployment numbers in either direction.
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